Over the last year, British fast fashion site Asos has been strongest on its home turf, as international sales took a hit due to jacked up prices — an issue the retailer has worked to correct by lowering pricing around the world, even if it meant sacrificing profits temporarily. On Tuesday, Asos had some good news to report: not only did it deliver the hefty sales growth investors like to see, but the U.S. and other parts of Europe actually outpaced gains in the U.K.
To be more precise, U.K. retail sales increased 27 percent for the four months that ended June 30, while U.S. sales were up 43 percent and Europe (excluding the UK) rose 21 percent. (If you eliminate exchange rate effects, that's 31 percent for the U.S. and 37 percent for Europe.) France and Germany are both showing strong momentum, Chief Financial Officer Nick Beighton said during a Tuesday morning webcast, although the latter does have a higher returns rate. To incentivize customers, Asos also put in place more targeted price reductions in Spain toward the end of June and introduced free returns (on a trial basis) in Italy and the Netherlands.
The rest of the world, alas, is not doing quite so hot. Ignoring exchange rate effects, sales grew just four percent in countries outside of the U.S. and Europe, hurt in part by Australia's weak dollar and a tough economic environment in Russia, which Beighton says hampered spending there.